Online Trading Blog

Bullish morning doji start pattern is one of the most reliable market reversal candlestick patterns which indicate a possible upward trend. The pattern is widely followed by all types of traders trading all financial instruments. Morning doji star formation is a three candlestick pattern, usually found at bottom of a downtrend.

The requirements of a bullish morning doji star pattern include,

• The pattern should be formed after a significant downtrend.
• The first day is a bearish day characterized by a long bearish (colored or black) candlestick.
• The second day is a doji, ideally gapped away from previous day’s candlestick.
• The third day is a bullish day characterized by a bullish (colorless or white) candlestick, ideally closing above the midpoint of first day candlestick.

Bullish morning doji star candlesticks are formed when the prices of instruments are at their lowest (oversold) positions. The bears are still in control and thus the bearish candlestick of first day. At second day there is high uncertainty in the market resulting in less trading volume and the formation of a doji candlestick. On third day bulls get the control and the market reverses for an upward trend. Although morning doji star pattern is a highly reliable one, confirmation is still suggested; which can be a bullish candlestick on fourth trading day. With this pattern, there is also a chance of formation of more than one doji stars.

Note: The gapping of doji candlestick is not a necessary requirement, especially for forex traders; as the forex market is continuous, the chance for gap formation is very rare.

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